American Flights Resume As Labor Woes Loom

Trinity Maughan, 6, of Peoria Ill. rests on a bag while waiting in line at O'Hare International Airport in Chicago, Monday April 7, 2008. American Airlines canceled 850 flights Wednesday, more than one-third of its schedule, as it spent a second straight day inspecting the wiring on some of its jets.

Thousands of people were exasperated and upset by the cancellation of more than 3,000 flights at American Airlines this week, and the loudest complaints came from the airline's own employees.

The pilots union took out full-page newspaper ads that asked, "Why is American Airlines Failing Its Customers?"

Flight attendants have renewed a campaign against stock bonuses for top executives.

There's nothing new about rocky management-labor relations at American, but this week's events have driven an even deeper wedge between executives and front-line workers.

American canceled 595 flights on Friday, bringing the running total to about 3,080, and said more flights would be lost Saturday. The cancellations started Tuesday, when American yanked 300 planes out of service to bring them up to federal safety standards on wrapping electrical wires to prevent fires.

The airline's mechanics and FAA inspectors cleared more of the planes to return to service Friday. American said 226 of its MD-80s were back in service by Friday morning, and it expected the rest to be ready by Saturday afternoon.

The airline thought it had done the repair work two weeks ago, when it scrubbed more than 400 flights, but the FAA said the wiring still was not properly secured and stowed in wheel wells.

Not everyone agrees that the massive disruption of American's flight schedule that followed was even necessary.

"You did not need to ground an entire fleet," airline industry analyst Darryn Jenkins told CBS News. "These things could have been done in overnight inspections."

CBS News correspondent Nancy Cordes reports that the issue was not whether American had failed to tie off the wiring in the wheel wells of its md-80s, as the FAA ordered in 2006. What grounded all 300 of American's MD-80s was actually the airline's failure to tie off the wires at precisely one inch intervals … some were an inch and a quarter, some an inch and a half.

"They will have used the micrometer and made sure that the spacing is one inch," said former National Transportation Safety Board member John Goglia, "Does that enhance safety in any way? No way at all."

The airline claims it asked for a few extra days to make the fixes, so it wouldn't have to cancel all those flights. But the FAA says it received no such request, adding that "some of the clamps were installed backwards," which "could result in chafing."

"While the safety risk is low," it said, "the consequences are high."

American Chairman and Chief Executive Gerard Arpey was skeptical, saying in a press converence, "We did not find any chafing of wires in any aircraft. So we believe that the aircraft were always operated safely."

Arpey also said he took responsibility and that neither American's mechanics nor the FAA were to blame. He said the company would hire a consultant to help it comply with FAA safety rules in the future.

Arpey said the cost - including vouchers to appease unhappy customers, overtime for maintenance crews, and lost revenue - would run into the tens of millions of dollars. An analyst with Standard & Poor's estimated it could easily top $30 million.

The cancellations also threatened to cost pilots money, since they only get paid for hours they fly. But on Thursday, the company and the Allied Pilots Association cut a deal that lets pilots get paid for their lost shifts if they were available to fly once the planes were fixed.

The pilots union has emerged as the most vocal critic of the company's performance this week.

The union took out a full-page advertisement in USA Today on Thursday, accusing the company of failing its customers. The ad showed a man dressed like a business traveler, sitting on a cot and scowling off into the distance.

The ad copy noted recent surveys that have rated American poorly for cancellations, late arrivals and customer satisfaction.

Scott Shankland, a first captain and spokesman for the union, said the ad was intended as a wake-up call for American's leaders. He said the MD-80s were safe, but "the cushion that keeps you safe is smaller" because of cutbacks to maintenance.

"This management team is driving reliability down to a point where it will drive customers away," Shankland said. "These guys are damaging this once-great airline."

The union, which represents 12,000 pilots at American, said Friday that pilots would demonstrate against the company in nine cities Tuesday to highlight what it called poor performance and customer service. Near Dallas-Fort Worth International Airport, the union also put up a billboard sounding the same themes.

Ray Neidl, an airline analyst with Calyon Securities, questioned the wisdom of the pilots criticizing their own airline in such a public way.

"Someone is giving them bad advice," Neidl said. "It's their jobs at stake."

Arpey declined to be drawn into the dispute with the pilots' union over the ad. He said the company has "thousands of dedicated pilots that are working their tails off to help us work our way through this situation."

A spokesman for American, John Hotard, was more direct.

"We're disappointed that any union would choose negative tactics in a direct attempt to harm the company," he said. "It's energy better spent strengthening the company."

Meanwhile, the Association of Professional Flight Attendants is pushing Arpey and the next top four executives at American's parent, AMR Corp., to decline stock bonuses they are expected to get next week or resign. Similar bonuses have been a flash point in labor-management relations since 2006.

The Transport Workers Union, which represents the mechanics who performed the wire-packing work on the planes, was less critical of the company.

A TWU vice president, Dennis Burchette, said FAA has made it more difficult to comply with safety rules by revising them frequently. He called the failed inspections "more a compliance issue than a safety question."

The cancellations affected some of American's oldest airplanes. Its MD-80s average 18 years in age.

Neidl, the airline analyst, said the groundings "may be more of an FAA administrator problem," but added that they have highlighted the fact that older aircraft need more care and attention.

American's entire fleet averages 15 years in age, the second oldest in the industry behind Northwest Airlines, according to regulatory filings by the airlines.